The Centre has argued that same-sex partners cannot claim the Income Tax Act’s gift exemption for a “spouse” unless Indian law recognises their relationship as a marriage. The petitioners say they are challenging unequal tax treatment—not asking the court to recognise their relationship as a marriage. The Karnataka High Court case remained unresolved in the latest located report, which said it was listed for further hearing on October 9, 2026.
What the Karnataka case is about
In Anurag Kalia and another v. Union of India and another, WP No. 28761/2025, the petitioners challenge the fifth proviso to Section 56(2)(x) of the Income Tax Act, 1961. They contest its exclusion of same-sex partners from the exemption for gifts received from a spouse. The Indian Express reported the Centre’s opposition and the hearing listing, while LiveLaw reported details of the petition and the parties’ arguments.
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The dispute is about the tax treatment of a gift between partners, but the legal question is narrower than whether same-sex couples should have marriage rights. It concerns whether the spouse-based exemption can apply to same-sex partners who are not recognised as spouses under current Indian law.
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Why a bracelet became the focus
The petition arose after Akhilesh Godi reportedly gave his partner, Anurag Kalia, a bracelet for their relationship anniversary. The 22-karat bracelet weighed 14.41 grams and was described as a family heirloom Godi had received from his father. The couple reportedly estimated its value at ₹115,500. These details describe the petitioners’ account as reported by LiveLaw and The Indian Express; they are not findings in a court judgment.
In its July 23, 2026 account, The Indian Express described Section 56(2)(x) as generally taxing certain money or property received without consideration when its value exceeds ₹50,000, subject to exceptions that include gifts from a “relative.” The report said Kalia was advised to have the bracelet valued and report it as income while preparing his return. That reported advice and the couple’s account do not establish a final tax assessment or liability in this case.
What the petitioners say
The petitioners seek equal application of the spouse gift exemption to people in a long-term, stable same-sex relationship. Their reported argument is that excluding them has an indirectly discriminatory effect. Their lawyers have said the petition does not ask the High Court to declare the couple married, presume a marriage, or recognise same-sex marriage; it challenges unequal treatment under a tax rule.
What the Centre argues
Solicitor General Tushar Mehta argued that “spouse” in this statutory context means a person in a legally sanctioned marital relationship. He said applying the exemption to same-sex partners would indirectly recognise a marriage that Indian law does not recognise. The Indian Express reported his position: “Same sex marriage is not recognised in India, and if the court recognises them for tax exemption purpose as spouses, then we would indirectly recognise their marriage.”
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The Centre also argued that courts should not read additional categories into a tax statute because doing so could affect other statutory schemes, and that the legislature—not the courts—should confer such rights. In an earlier hearing, the government was also reported to have defended the exemption as relying on legally verifiable family relationships, such as marriage or blood ties, to avoid uncertainty in administration.
During that July hearing, Justice B. M. Shyam Prasad made a reported oral observation about the exemption’s design and the risk of uncertainty if the provision were read down. An oral observation during a hearing is not a final ruling or a holding on the case.
How the arguments differ
The parties frame the legal issue differently. For the Centre, applying the spouse exemption depends on a legally recognised marital status and administrable categories. For the petitioners, limiting the exemption to legally recognised spouses disadvantages same-sex partners, and the court can address that tax classification without declaring them married.
That difference also raises a question about institutional role. The Centre says extending a spouse-based entitlement beyond legally recognised marriage would effectively create a status or benefit that Parliament must provide. The petitioners say the court can assess whether the tax rule discriminates without creating a marriage-like legal status.
Why the Supreme Court’s Supriyo judgment matters—and what it does not decide
In Supriyo v. Union of India (2023), the Supreme Court concluded that legal recognition of a union akin to marriage or a civil union can come only through enacted law; courts cannot direct the creation of a regulatory framework conferring that legal status. The judgment also affirmed queer people’s right to form relationships while distinguishing that right from entitlement to legal status for a union. The judgment is available from the Supreme Court of India.
The Centre invokes Supriyo to support its argument that courts cannot create spouse-based entitlements for same-sex unions through interpretation. But the available case reporting does not establish that Supriyo has already decided the scope or constitutionality of this particular Income Tax Act proviso. The Karnataka petition remains a distinct tax challenge.
Case status: the October 9 hearing outcome is not established
The Indian Express reported on September 19, 2026 that Justice B. M. Shyam Prasad had listed the matter for further hearing on October 9, 2026. The available reporting does not establish what happened at that hearing. It therefore does not support saying that the High Court accepted either side’s argument or issued a ruling.
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